Employer Liable for Conduct of Private Investigators

The Illinois Supreme Court ruled last week that employers may face civil liability for privacy violations committed by their outside investigators.

North American Corporation of Illinois retained a firm to investigate whether its former salesperson, Kathleen Lawlor, had violated a noncompetition agreement. North American provided the firm with Lawlor’s birth date, address, home and mobile phone numbers, and social security number. Using this information, an investigator posed as Lawlor to obtain her personal phone records from her telephone carriers.

Lawlor sued North American, alleging intrusion upon seclusion. To prevail under this common law privacy tort, the plaintiff must demonstrate that the defendant’s intrusion upon her privacy is highly offensive to a reasonable person. Lawlor claimed that North American was vicariously liable for the intrusion because the investigators were North American’s agents. North American argued that it was not vicariously liable because it did not know how the investigative firm obtained the phone records. The jury returned a verdict for Lawlor, and awarded her $65,000 in compensatory damages and $1.75 million in punitive damages.

The Illinois Supreme Court held that North American is vicariously liable for the investigative firm’s conduct. Although there was no direct evidence that North American knew how the firm had acquired Lawlor’s phone records, the Court concluded that the jury could reasonably infer that North American “was aware that Lawlor’s phone records were not publicly available,” and that “North American was setting into motion a process by which investigators would pose as Lawlor to obtain the material.” But the Court capped punitive damages at $65,000 because there was no evidence that North American orchestrated an “intentional, premeditated scheme to harm Lawlor.”

This is the first Illinois Supreme Court decision to allow a cause of action for intrusion upon seclusion, although many other states have long recognized the tort.